Interest Group Wants to End Natural Gas Exports

February 7, 2013

A new organization called America's Energy Advantage (AEA) is lobbying to limit U.S. exports of natural gas on grounds that the consequences of such exports have not been considered. The AEA follows the precedent of large companies seeking federal regulatory statues to limit competition, says the Institute for Energy Research.

The companies comprising the AEA include Alcoa, Celanese Corporation, Dow Chemical, Eastman Chemical, Huntsman Corp., Nucor Steel and the American Public Gas Association, all of which have a financial interest in limiting exports because their businesses use natural gas heavily.

AEA claims that it supports free trade, but in reality it intends to limit competition and make the companies better off at the expense of other Americans.

Natural gas prices have fallen about 50 percent in the last few years as a result of increased production due to hydraulic fracturing.

What the companies that comprise the AEA do not understand is that pushing the federal government to restrict exports and limit consumption may ultimately lead to higher domestic natural gas prices in the future. Government interference in the free market will only lead to higher prices for other companies who are subject to the forces of supply, demand and price.

The Institute for Energy Research illuminates the hypocrisy of the companies who are advocating natural gas export limitations to protect domestic products, yet do not wish to limit exports of their own products.

The best policy to address the AEA's concerns would involve increasing overall natural gas production.

Increased supply in the long-run would lower everyone's prices without government interference in our economy that stands to violate free trade agreements and the spirit of the founders, who sought to protect individuals against unnecessary government actions.

The companies' bottom lines would be best served in the long-run if they drop their protectionist stance and instead push the Obama administration to end the moratorium on offshore drilling, speed up licensing and rescind the Environmental Protection Agency sanction that bans the use of coal to generate electricity, despite America having the largest coal supplies in the world.